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Music streaming start-up Deezer bags massive $130 million investment

Paris-based music stream­ing firm Deez­er have made his­to­ry by secur­ing the biggest round of invest­ment fund­ing for a start-up ever seen in “la République Française.”

In news that will pro­voke envy amongst busi­ness devel­op­ment asso­ciates and chief rev­enue offi­cers through­out the media world, Deez­er has just attract­ed fund­ing of $130 mil­lion (€100 mil­lion) from Access Indus­tries (which owns Warn­er Music Group).

Deez­er began in France in August 2006 as a total­ly web-based music stream­ing firm, offer­ing instant access with no down­loads or soft­ware.  Users can play their favorite tunes on tablets, smart­phones, TV and even in the car.  It now has 18 mil­lion licensed tracks and has been striv­ing to break out of local bound­aries by expand­ing its user base to include inter­na­tion­al customers.

Inno­va­tion and competition

Start-ups in the music tech­nol­o­gy indus­try have shown much inge­nu­ity in their quest to cor­ner niche spaces.  SoundHound’s stratos­pher­ic suc­cess is a case in point, although com­pe­ti­tion can be excep­tion­al­ly keen in the music stream­ing are­na (just wit­ness the titan­ic strug­gle between Spo­ti­fy and Pan­do­ra, for instance). And, with mobile plat­forms becom­ing ever-more avail­able to the mass­es, it’s a fair bet that the com­pe­ti­tion will get even fiercer.

A boon or a millstone?

So might there be a down­side for Deez­er in such mas­sive invest­ment com­ing from one source? Music com­pa­nies, led by Warn­er Music Group, will undoubt­ed­ly have a mas­sive influ­ence on the company’s future.  This may be all for the best, but stream­ing firms are known to be heav­i­ly depen­dent on their music indus­try deals, a prospect which could yet bite Deez­er on its der­riere.  When the con­tract comes up for renew­al, the nego­ti­a­tion process is almost sure to be dis­tinct­ly one-sided and may pro­pel the com­pa­ny in direc­tions its founder may not wish to pursue.

Even so, Deez­er has set its sights high.  With 30,000 Smar­tRa­dio chan­nels and 26 mil­lion users, it has already launched in 100 of the 200 coun­tries it tar­get­ed last year.  Deez­er CEO Alex Dauchez com­ment­ed, “This invest­ment comes at the right moment to change the scope of ambi­tion.  We have proved the mod­el.  We have proved that in some coun­tries that have nev­er mon­e­tized before we are cur­rent­ly gen­er­at­ing rev­enue for the music indus­try.  In terms of vol­ume, the big steps are in front of us.”

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